Correction or Crash?

[georgihh]

The big fishes are already out of the market with the cash (200billion$)
Whatever is left is me and couple more trying to satisfy themselves in this forum.
Unfortunately if AD doesn’t splash the cash the game is over.
They will splash the cash but when and how much the prices will go down nobody knows.

 

[mohammedno11]

Figures for the next year in a conservative and realistic way:

1) Ready Properties will decrease to the level of 2006 maybe Middle 2007 if we are lucky. I am connected to agents networks and I receive tons of mails with distressed sales. Already with prices from Middle of 2007 and even less.
Some special locations will not fall as much !

2) Offplan will be nearly dead next year. Developers will have to calculate as in other matured markets (30% sales before construction, 30% during construction and 40% after completion) Developers who dont have the equity will dissapear. Dubai will see lots of bancrupt companies next year.

3) This decrease and a soft landing will require at least 1 to 2 years. After that investors will have to regain trust, banks need liquidity and the prices will surge moderate with a single digit % per year.

Let hope for a wonder, but I think this is realistic.

 

[georgihh]

Figures for the next year in a conservative and realistic way:

1) Ready Properties will decrease to the level of 2006 maybe Middle 2007 if we are lucky. I am connected to agents networks and I receive tons of mails with distressed sales. Already with prices from Middle of 2007 and even less.
Some special locations will not fall as much !

2) Offplan will be nearly dead next year. Developers will have to calculate as in other matured markets (30% sales before construction, 30% during construction and 40% after completion) Developers who dont have the equity will dissapear. Dubai will see lots of bancrupt companies next year.

3) This decrease and a soft landing will require at least 1 to 2 years. After that investors will have to regain trust, banks need liquidity and the prices will surge moderate with a single digit % per year.

Let hope for a wonder, but I think this is realistic.

Sounds realistic but we will not reach the prices from summer 2007
For example a studio in DG was 350k that time and now is 700k
A villa 3m in springs was 2 million and now 4million
Maybe something between is more realistic but not that low.
Dubai marina was already hit beadily and JBR is on the way.
JVS, Sport City and all the other cities will sink.
Generally speaking the developments around emirates road will become much cheaper than the properties around SZR

 

[mohammedno11]

Water Home Palm Jebel Ali: 3.800.000 negotiable

Garden Home Palm Jebel Ali: 5.000.000 negotiable

Springs Townhouses: 20% compared to 6 month ago

Plots in Dubail Land and Jumeirah Village: 130 AED/Sqft. price from December 2006

Jumeirah Lake Towers: One bedroom in Goldcrest 900.000 AED

Just prices from emails which I received today. Agents dont publish these prices in the paper, because they are scared to ruin the market even more.

That the reality !

 

[TommyC]

Down, down, down...

It sucks to be sitting on apartments, bought off-plan for discount...money lost in stock market, not being able to get mortgage due all that's happening and looking at paying back debt for the next 3 years instead of being able to enjoy my stay. Law 13 would have saved me from a total personal bankrupcy, after getting to know that my developer is actually using defaults as a valid mean to gain cash to their project. They simply don't give a sh*t even though I've proposed solutions that should be in mutual interest, between the lines the reply was: "Yeah, that would work, but we rather have you defaulting in case we need to cancel the project later, would save us a bit of money."

 

[georgihh]

Water Home Palm Jebel Ali: 3.800.000 negotiable

Garden Home Palm Jebel Ali: 5.000.000 negotiable

Springs Townhouses: 20% compared to 6 month ago

Plots in Dubail Land and Jumeirah Village: 130 AED/Sqft. price from December 2006

Jumeirah Lake Towers: One bedroom in Goldcrest 900.000 AED

Just prices from emails which I received today. Agents dont publish these prices in the paper, because they are scared to ruin the market even more.

That the reality !

Not much down apart for the land and the postponed Palm.
This is normal everybody is trying to cash up on the piece of paper.
JVS will sink big time anyway – this place is so overprized and nothing is happening in this area.
Goldcrest is a good price but still can go down.
Get me a studio in DG with the price from summer 2007 and I will buy

 

[Wannaberich]

Figures for the next year in a conservative and realistic way:

1) Ready Properties will decrease to the level of 2006 maybe Middle 2007 if we are lucky. I am connected to agents networks and I receive tons of mails with distressed sales. Already with prices from Middle of 2007 and even less.
Some special locations will not fall as much !

2) Offplan will be nearly dead next year. Developers will have to calculate as in other matured markets (30% sales before construction, 30% during construction and 40% after completion) Developers who dont have the equity will dissapear. Dubai will see lots of bancrupt companies next year.

3) This decrease and a soft landing will require at least 1 to 2 years. After that investors will have to regain trust, banks need liquidity and the prices will surge moderate with a single digit % per year.

Let hope for a wonder, but I think this is realistic.

What comes down will only go up again and fast.Dubai is turning into an amazing city so anyone who invests here cannot lose.
Yes off-plan will be dead next year,probably already dead.That makes me so happy because the short supply of completed properties in Dubai will get even worse.It will be years before supply meets demand.That means completed properties are a safe bet.That also means whilst prices may be coming down slightly at the moment,they will go up next year as the economy recovers and the shortage of properties gets worse.In the meantime,those lovely sky high rents which have been totally unaffected by the global crisis just keep getting higher.
Whos panicking out there cos I sure aint.

 

[TommyC]

Well, in my opinion, what is going on is maybe not a total crash but we're looking at a long standstill. Apparently they want all small private investors out of the market in a single blow, I heard today there is a circular out from the Central Bank that they will restrict off-plan lending to 50% LTV. The amount of people looking at losing a LOT of money will be long, unless you already have your pre-approval with the current LTV (anywhere between 75-60%). No one will help you, no one will save you, and frankly the country itself is looking to maybe be bailed out by their wealthier cousin Abu Dhabi. Just imagine how it will feel to lose face like that...

Anyway, back on topic. It's a strange situation. Sure, there is a shortage of places to stay, rents are high, prices falling right now, but no one can get a mortgage. As soon as they start lending people money again I'm sure prices will bump up to the rent-vs-mortgage prices, whatever that might be, and stay there.... Only big time, supersolid investors, and developers for that matter, will be in the offplan market, which is the way it should have been a long time ago. At the time the Head was so satisfied about the headlines he could barely stay calm, and therefor didn't even think about starting to regulate this place in time.

 

[Wannaberich]

Developers will start to offer more attrative payment plans.This is the way forward.Emarr have just launched two easy payment schemes.Axis Residence was launched at Silicon Oasis two weeks ago.After a few days 75% of 657 units were sold ! Why ? Because the payment plan is fantastic,plus construction is well under way.They were able to charge 1450psf which is high yet they still sold all these units.
Get your payment plan right and as a developer you can still sell even in these times.

 

[Dweebo]

Water Home Palm Jebel Ali: 3.800.000 negotiable

Garden Home Palm Jebel Ali: 5.000.000 negotiable

Springs Townhouses: 20% compared to 6 month ago

Plots in Dubail Land and Jumeirah Village: 130 AED/Sqft. price from December 2006

Jumeirah Lake Towers: One bedroom in Goldcrest 900.000 AED

Just prices from emails which I received today. Agents dont publish these prices in the paper, because they are scared to ruin the market even more.

That the reality !

Hi Mohammedno11, could I ask which estate agents you are getting these emails from with the distressed sales? I'm on a few mailing lists but dont seem to be getting the sorts of prices you are being quoted (I'm obviously on the wrong mailing lists ).
Thanks.

 

[NwAli]

well

JLT dubai gate 1 2 br for 1.6M ready by dec

executive tower business bay 1530 persq.ft

Veneto on Minus 8

Oak wood residence minus 5

jumeirah park small 3.6


have got list of distress there are loads just ppl dont want to scare you are u are in the wrong mailing list get a reality check ..

regards

 

[georgihh]

well

JLT dubai gate 1 2 br for 1.6M ready by dec

executive tower business bay 1530 persq.ft

Veneto on Minus 8

Oak wood residence minus 5

jumeirah park small 3.6


have got list of distress there are loads just ppl dont want to scare you are u are in the wrong mailing list get a reality check ..

regards

Looks like the prices are going down everyday.
OFF plan is dead and the completed projects are also going down.
The investors want the money back from the developer and the developer has no money.
If this doesn’t improve in the next month I will say is going to be a crash.
It’s not a joke this time there is no money.
And the government should start acting quickly as the things are getting out of proportions.

 

[Wannaberich]

Off-Plans have halted.This will mean an even greater shortage of completed properties.This in turn will push prices back up.Maybe there will be another surge.Rents will also keep going up.So far they havent been affected.3-6 months and the pain will be over and anyone with property in Dubai will be smiling again.

Gulfnews: Dubai real estate prices expected to rise

 

[Mikal]

3-6 months is rather optimistic isnt it?

Assume for one second that the banks go back to lending out funds tomorrow (80% LTV ratio) how many people do you think would rush back to the market to buy - they would have not recovered from the trauma of this current "correction".

If an investor is in the mood of selling "at any cost" do you really think that by a flip of a switch he/she would reverse their thought process completely in a few uneasy months- one would assume he/she would go to the positio of hold rather than buy.

Yes people do tend to forget but 3-6 months may be a bit too unrealistic - may be 2010 at the earliest.

 

[aviduser]

Again optomistic

I do not know why people wanted to do Distress Sales. Dubai, it will take time to mature, the correction, I mean the real correction will take only after many years. The government is giving protection to the Dubai Investors. The projects are announcing in Dubai is still at the beginning. The government has a plan behind this, they will protect the investments.

Look at the new Investments, Meraas for the example. It will cover and spread over Satwa and Jumeirah 1&2. With in a couple of years, the tenants have to move out of this area and look out for new areas to live. They can move to JLT, Marina or to the Dubailand only, so there is not going to be any more vacant flats or villas.

The same way, there are projects, the government is going to launch , revamping the entire Ras Al Khor and Rashidiya by next year, again the tenants have to move out to new destinations. Followed by Al Qouze, Deira and Al Ghusais and at the end, it is Bur Dubai and Jumeirah, Umm Suquiem area. All these projects will be finishing by 2025.
Think, once Deira and Bur Dubai is going for a shift, where all this public will move in to.By the time, all Dubailand will be congested and the rental Income will be more.

Other than this, please look in to the projects announced already. The new Al Maktoum International Airport at Jabal Ali needs 135000 employees, once it is operational. This airport will open in the 4th quarter of 2009. Look at the number of hotels are coming up, according to Movenpick, they alone need around 12000 new staffs by the end of 2009. The Metro line will be operational from 2009 and the construction will start for the Blue Line and Purple line from 2010. Once Business Bay is complete more global giants are moving to Dubai.

Right now, Dubai is the only safe heaven for the Investors. People they lost jobs in US, UK and Europe, they have move towards Middle East. 90% of those people are eyeing Dubai. With in months they will move to Dubai and they started buying properties, the prices will again go up.

After all, as RERA and govt departments say, Dubai is not a market for speculators. This should be ended. Right now, the Investors are looking for resale from day one of the properties, In future; they can only resell it only after one year or after the completion of the project.

Dear investors, please note, Dubai is not ruled by Democracy but Monarchy. In democracy, there are ruling party and opposition and they can adopt any type of policies. That can lead destruct ions in the market. Dubai is ruled by Visionary, Business Oriented Leaders. They also have Business Interests. So they never let you down.

Look at the Rent, it is just increasing only, I never saw it is decreasing. Again it will go up all these coming years. The present City cannot afford the flow of people right now. And Dubai is growing and it will grow only.

The Airport will need 135,000 people, fair enough but just how many of those will be able to afford the rent on any of these places, similarly the hotels, do you think the hoards of Indians, Sri Lankans and Filipinos will be able to rent top quality apartments. They will be lucky to be paid enough to eat let alone rent anywhere.

This is the fundamental mistake of Dubai, they insist on paying migrant workers so little that they have no choice to live 30 to a room and send all their money home.

Now imagine if all those hotel and airport employees were being paid what people at Heathrow do, then you really would have a demand in the market.

As it is there is simply not enough demand for the apartments already built and this is Dubai's main problem.

 

[monsi]

I tend to agree with DoBuy.

I have a suspicion the Government in Dubai is going to move very soon to sort out the lending issue. However, the mortgages available will be designed to favour long-term investors and end-users, rather than flippers.

People have very very short memories when it comes to fear and greed. The current market downturn is fueled by fear - great for the scavengers - improved lending and high rentals will switch the motivation back to greed.

I think there will be series of Government-backed liquidity initiatives announced soon. The high season won't be allowed to pass with the prevailing sentiment of doom and depression. The new year is likely to start with a lot more optimism.

The off-plans will take a lot longer to recover than complete/near-complete properties and people will trend towards major (master) developers.

 

[dubister]

Off-Plans have halted.This will mean an even greater shortage of completed properties.This in turn will push prices back up.Maybe there will be another surge.Rents will also keep going up.So far they havent been affected.3-6 months and the pain will be over and anyone with property in Dubai will be smiling again.

Gulfnews: Dubai real estate prices expected to rise

I think it is too much wishful thinking. Right now, the situation on the verge of scary and govt needs to step in to save the market and investors, not the fat cats and companies. Currently they are busy only doing that. Once they are done streamlining or whatever they are calling, they should without wasting time fix some MAJOR FUNDAMETALS that are wrong in Dubai right now. Starting from Immigration Laws, Property related Immigration Laws, Fair EIBOR as per the world market with out too much premium, lending LTV to 90 or even 95% aimed at end-users of Dubai.

 

[Wannaberich]

Stop panicking.Banks will start lending again soon.As soon as that happens things will stabilise.Late next year/early 2010 there will be another price surge.This is all temporary.

Dubai is growing.As it finishes more projects more people will come.
Its had an awesome amount of TV coverage the last weekThe Atlantis party and fireworks
had major coverage.The arrival of the QE2 has also had major coverage.
Sky News are running a week long series 'Eye on the Emirates'.Loads of coverage on Dubai and Abu Dhabi.
Dubai is on the map and getting more and more noticed every day.
Calm down and chill out.Its all good.

 

[cheemz]

unregulated market systems operate on investor confidence...
and confidence seems to continue getting shattered day by day... don't forget, most who invest in Dubai, also invest throughout other financial markets in which they have probably lost 50+% of their capital.
Dubai's Property market cannot pick up until the global recession (which i think is just getting under way) stabilizes...

 

[dubister]

unregulated market systems operate on investor confidence...
and confidence seems to continue getting shattered day by day... don't forget, most who invest in Dubai, also invest throughout other financial markets in which they have probably lost 50+% of their capital.
Dubai's Property market cannot pick up until the global recession (which i think is just getting under way) stabilizes...

The U.S property market is still holding up, havent heard any 50% drops like here. Yes maybe in the stock market, but then that is the stock market. Realestate in other countries stay flat and or loose marginally, not what we here...